With the Cape tourist authorities predicting an influx of over 200 000 visitors this summer, estate agents are finding that interest in homes in resort areas is once again picking up, says Tony Clarke, MD of Rawson Properties.
'With holiday rentals in areas like Hermanus, Plettenberg Bay and the West Coast now often over R1 000 per day, it comes as no surprise to find that canny investors see this as the way to go,' said Clarke.
With the National Credit Act now in operation and with interest rates no longer providing an easy ride, many investors, said Clarke, are now interested in fractional or syndicate ownership, i.e. in buying holiday homes with partners. However, he warns, the banks are very reluctant to finance bonds with multi-owners and this can make such deals difficult.
Clarke added that, with the 'traditional' holiday resorts now high priced, it would be wise to invest in towns that have not yet reached the peak. In the Western Cape this would include homes on the West Coast and beyond Hermanus.
Clarke says that lock-up and go apartments in holiday areas are generally more secure and have less maintenance problems than single residential homes, but are not as well suited to entertaining.
Owners deciding to rent out holiday property should, says Clarke, not attempt to do this on their own: they should employ a recognised professional agent to act on their behalf.
'The selection of tenants and the elimination of those likely to be irresponsible,' says Clarke, 'is best left to those with experience in this field. Professional agents know how to screen applicants credit records and recognise those who are likely to pose a credit or damages risk'
Short term tenants, added Clarke, have always been a more serious risk than long-term tenants but a good agent will call on them regularly '“ sometimes as much as one a day '“ to make sure they are respecting the property.
Those buying vacant holiday home land rather than a completed unit, says Clarke, should bear in mind that the days of selling a plot a year or two later at double the value are over.
'The appreciation here will be in line with predicted national figures for 2008 which are lower than those of recent years. However, as a long-term investment this type of property is still a very good option'
